JrElDERAL REPORTER.
LoNGDALE· IRON CO. ".POMEROY IRON CO. et
ale
(Oircuit Oourt, S, D. Ohio; W; D. March 00, 1888.) HUSBAND ERS.
AND
WIFE-WIll'E'S SEPARATE .
Where stock is entered on the company's books by authority of a director in the name ·of his wife, he afterwar.ds voting and representing the stock, and it does not appear tbatshe authorized or subsequently ratified his acts, or receivec;l any dividends from, or claimed any interest in, the stock, it is error to c,harge her separate- estate with the debts Of the company tothe amount of stock thus standing in her name. )
In -Equity. Exceptions to report of special master:. A{n'ed Yaple and E. A ·. Guthrie. for complainant. La'Wl'ertce Maxwell, Jr., for defendants. JACKSON,J. On exceptions by Lawrence Maxwell, administrator of the estate of Julia A. Pomeroy, deceased, to the report of the special master, filed herein April 8, 1887,.in and by which Mrs, JuliaA. Pomeroy is found to be a stockholder in said Pomeroy Iron Company, and her estate charged accordingly. It appears from the record and report of the Inaster that the-Pomeroy Iro11 Company, a manufacturing corpO'ration, incorporated under the laws of Ohio, became insolvent in 1878, and suspended business, leaving large debts outstanding anduusatisfied. This indebtedness having been generally reduced to jlldgments, and the creditors'remedies at law against the corporation being exhausted, the present bill was filed by the complainant on behalf of itself and all other creditors of the company seeking to hold the stockholders individua:lly . liable on their respective holdings of stock to the extent necessary to pay off the debts of the corporation, (stockholders being personally liable, by the laws orOhio, in such cllses, for the amount oftheir stock,if needed to discharge the debts ofthe company,) A referencewa.s-directed to a special master to report tiie indebtedness ofthe company, the names of its stockholders, and the several amounts of stock held and owned by them respectively, etc. The special master found and reported that Mrs. Julia A. Pomeroy was a stockholder in the company at the date of its failure to the amount of 88,300, which, with interest to April 1, 1887, made her estate liable for the sum of $12,443.07. To this finding and report of the special master the administrator of Mrs. Pomeroy's estate files exceptioll, the general ground of his exception being that the proof does not establish the fact, which wasdisptited and controverted, that Mrs. Pomeroy waR a stockholder as reported. The evidence and report of the master disclose the following state of facts. On the st{)ck ledger and transfer book 'of the company there is an entry under date of June 27, 1866, which purports to he a tra.nsfer by the company to Mrs. J. A. Pomeroy of 50 shares of itsstock,-par value, $5,000. In January, 1867, a stock dividend of 115 per cer,t. was declared by the company, making an increase of 57 i shares, cf the nom-
LONGDALE mON 00.· V. POMEROY mON CO.
449
ina! value of $5,750, to be placed upon the of the company to the credit of Mrs. J. A. Pomeroy. The capital stock of the company having been increased, there was entered up upon the stock-book of the company, under date of March 8, 1867, to Mrs. J. A. Pomeroy, as additionalstock due her on said dividend and subscribed for by her, 125 shares, ($12,500.) In July, 1867, an additional stock dividend of 5 percent. was declared, and eight shares ($800) of stock were then entered to the credit of Mrs. Pomeroy on the books of the company, making a total of 183 shares to her credit upon the books of the company on the 12th July, 1867. Under date of September 10, 1870, there is an entry on said books showing that 100 shares of the stock standing to Mrs. Pomeroy's credit was transferred to Arthur W. Pomeroy. John A. Pomeroy, the husband of Mrs. Julia A. Pomeroy, was a stockholder and director ,in said company, and it appears from the evidence taken under the reference that the 50 shares of stock placed to the credit of Mrs. J. A. Pomeroy in June, 1866, were transferred under the following circumstances: D. M. Sickler, the holder of said 50 shares, in April, 1866, sold the same to the company. While it held these shares, said J. A. Pomeroy bought them from the company, paid for them at his store, and they were thereupon transferred upon its books to J. A. Pomeroy. Afterwards the word" Mrs." was inserted before the name of "J. A. Pomeroy," so as to make the name stand, "Mrs. J. A. Pomeroy," instead of" J. A. Pomeroy," as originally entered. This was done by direction of John A. Pomeroy, who purchased the stock, and paid for it. It does not appear that Mrs. Pomeroy ever had any notice or knowledge of the transaction. The 115 per cent. on this stock was placed to her credit without her knowledge, or any direction from her, so far as shown by the evidence. This stock dividend, and the new subscription of 67i shares, making 125 shares, ($12,500,) were placed to her credit by the direction of her husband, the saidJ. A. Pomeroy. The 100 shares of the stock standing in Mrs. Pomeroy's name, which was transferred to Arthur W. Pomeroy, was made at the instance and by the directibn of said J. A. Pomeroy. This transfer upon the stock transfer book purports to have been made by the secretary of the company, Col. Cyrus Grant, as attorney for Mrs. J. A. Pomeroy. This power of attorney is not produced. Col. Grant does not know that it was in fact executed by Mrs. Pomeroy, or in any way authorized by her. The stock standing in Mrs. Pomeroy's nume was always voted, represented, and controlled by her husband, J. A. Pomeroy, who directed the transfer of 100 shares thereof in September, 1870, to his brother, Arthur W. Pomeroy. No proxy or proxies from Mrs. Pomeroy to her husband to vote and to represent the stock standing in her name are produced. Proxies and power of attorney to vote and transfer stock were filed in the vaults of the company, and the secretary thinks that they can be found there. Mrs. Pomeroy's signature was not known to the secretary, and when the husband produced a proxy purporting to be signed by her, (if such proxies· were offered,) that was deemed sufficient to authorize him to vote and represent the stock standing in her name. It is not shown that Mrs. Pomev.34F.no.6-29
1'OY'l!husband was her agent in respect to these or other trl,U:lsactions. Nor does it appear that he ha.d the management of hel,' separate estate, or was intrusted. with the investment of her, private means. It does. not appear that· he. had any authority to take stock of the company in. her name, or that she was ,ever informed that he had done so.· In July or August, 3.877, the oithe company ca.lledupon het: 'at her home, in the presence of her husband, with a requeetto indorse notes,of the company.. This she declined to do, the book-keeper thinksdhough he iR not of it; that he then said to her that her name wason the books for 8.8,OOO'oi the stock. She neither admitted nor denied.the statement, if it was made, but declined to indorse the. notes of the cornpany· It does not appear that she ever accepted any dividends in cash or stock from, the company, or exercised any control over the stock" or assertll4 anyngb:li"jtitle, or interest in and to the same. She died since the institl:luonof this suit, before her testimony was taken. Her administraa.mQngher papers.. tor has found no certificates of stock ill Hflr husband, J. A.Pomeroy; died insolvent before theinstitution of the present'suit. . , Under these circuIl)stances, can1{,rs. Pomeroy be held as a. holder in the company, and her estate be subjected to the liability ing from tbahelation?· In TUr'nhuU v. Payson, 95 U. S. 418, it is beld by the supreme court, that" when the name of an individual appears pn the stock-book of a corporation as a stockholder, the ptim-a facie presumption is that he is the owner of the stoQk, in a case where there is nothing to rebut that presumption; and in an action against him as a stockholder, the burden of proving that, he is not a stockholder, or of rebutting that presumption, is cast upon the defendant," citing numerous authorities. In that case it appeared that the defendant had signed a receipt dividend on the stock standing in hisn.ame, which was of itselhufficient to show acceptance. on his .part. But aside from that circumstance, under the authority of thtlt decision,if nothing. more appeared in the cilse, then the. fact that Mr.s; .Pomeroy's name stood upon the books of the company as stockholder, she and her estate would be liable as such. But in explanation of bow her name came to be placed upon the books of the company, the secretary of the bompany, as the proper officer hav. ing tbecustody of said books, has disclosed a state of facts which, ill the opinion of the cburt, negative the .prima facie presQ.mption aril;ing from her name being found upon the books as a stockholde.r. When it WafS developed that her husband had placed her name there, then it became his action, or had subnecessary to show. that she had sequently.· ratified and adopted it. . The evidence does not establish either of these facts. Thereia,np .presumption of law or of fact that J. A.Pomeroy, the husband, wastbe agent of his wife, invested with auand when it was shown that the stock thority to take stock in her. was taken, or placed in her name. by bis authority or direction, it became necessary, in order to bind her; to assume that he was authorized so to act for and on her behalf. This presumption cannot be indulged. There is nothing in the relatipnsbip of the parties to warrant s\lch an in· 'I,
LONGDALE
nroN '00.
mON CO.
ference. In respect to her separate estate. sought to be bound by the husband's acts, the Wife niust be treated and stand upon the same footing as an entire, Itroay be that the 4usbandand company would both be estbpped from disputing'Mrs. Pomeroy's ownership of the stock placed in her name under the circumstances above stated, until she doell some acts signifying her acceptance of the same, she 'is not to be regarded as the owner of the stock,and subject to the liabili· , ties thence arising in favor of creditors. The decision in Purnbti,ll v. Payson, 95 U. S. 418,' is distinguishable from, and does not control the of the doctrine present ca,se. It would be an unwarrantable there announced to apply it here. The true principle applicable to the facts of this case is stated in Low. Tr. Stocks, § 81, note 1, and cases cited, as follows: "Although the books of the corporation are not conclusive evidence of title. yet they declare that the persons whose names appear in them do in fact own the stock as therein stated. Anyone. therefore. who makes sl1ch statement, by causing a record to be made in the books of the corporation. may br.. estopped to deny that the !!tatement is tl'Ue, if the denial would injure a per son who.has been misled by the record in the books"A·false representation of this kind is made by anyone who allows his name to be entered on the bookS for stock that does .not belong to him, or by one who causes another person to be recorded as the owner of stock which belongs in fact to himself. In those cases the entry oli the books has no effect in the actnal passing of the legal title, but on a.ccount of the misconduct of the person who makes the false record, an estoppel arises in favor of the injured party, who may avail himself of it or not, at his option. The party Injured is not bound by the statement in tbe books, but be has a rigbt to insist that the person who caused the entries to be made sball not be heard to say that they are wrong. It is, of cOl1rse; essential that the false entry should have been made with the consent of the person against whom estoppel avails; for it is clear that an entry in the books can create no rigbt again!!t a person who never knew tbat the entry was made." Taken as a whole, the evidence in this case is not sufficifmt to sustain the finding that Mrs. Julia A. Pomeroy was It stockholder in the Pomeroy Iron Company, as reported by the special master. The exception of ber administrator to the report is sustained, and a decree may be entered discharging her estate from liability on that account, and dismissing the bill as to her administrator with costs. In all other respects the report of the special master is confirmed, and propAr decree will be made in the'case for collection of the amonnts reported as due from the several stockholders, and for distribution of the same among the creditors of the company, whose claims have been allowed. The counsel for complainant will be allowed a reasonable and proper fee for representing the interests and asserting the rights of the parties entitled to the funds to be collected, and It reference is directed to the special master to ascertain and report npon such allowance.
BOLTZ
et ale ".
EAGON.
(Oirouit Court, H. D. Mis8ouri,B. lJ. April 9. 1888.) ATTACJmJllNT--lNTERVENTION-P!.EADmG-JUDGMENT BY DEFAULT.
...
Where property in the possession of an assignee under the Missouri statutes for the benefit of creditors has been seized on a writ of attachment issuing from the federal court in a suit against the assignor, the petition of intervention, filed b, leave of court in the attachment suit, by the assignee the restoratIOn of the property, is not a statutory interplea under the Missoun statutes; and the failure of the plaintiff in the attachment suit to answer the petition, the attaching officer having duly filed his answer, will not entitle defendant to a judgment by default.
In Equity. Intervention in attachment. by default. Dyer, Lee &- Ellis, for plaintiffs. Henry W. Bcmd, for intervenor.
On motion for judgment
THAYER, J., (oraUy.) In this case it appears that aSRignee of Eagon, intervened in the case, and moved to quash an attachment writ issued against Eagon, which had been levied on the assigned effects, claiming that the goods were in the custody of the law, and not subject to levy under an attachment or execution. This motion was denied Borne days since, for reasons then given, but the court announced at the time that, if the assignee demanded the goods in specie for the purposes of his trust, and was unwilling to resort to his common-law or statutory remedy against the marshal for a wrongful levy, it would entertain an intervening petition in the case, on the authority of Gumbel, v. Pitkin, 8 Sup. Ct. Rep.. 379, (a case recently decided by the supreme court of the United States.) and try the question of the marshal's right to make the levy,. and in the mean time would direct him to the sale of the property pendente lite, which had then been ordered and advertised. Acting presumptively on this intimation, the assignee asked and obtained leave to file an intervening petition, and at his instance the sale of the property was postponed to await the determination of the marshal's right to make the levy in question. In other words. as the property could not be replevied from the marshal under the rule which obtains in the federal courts, the court aimed to give the assignee· the full benefit efit of a writ of repleVin by means of an intervening petition under the authority above cited. This right was accordedin view of the fact that the assignee would have had the right to reclaim the property by a writ of replevin, if the seizure had been made under process emanating from a·state court. It is now insisted that the intervening petition filed in pursuance of the leave so given is a statutory interplea under the Missouri statutes; and a default is asked against the plaintiffs in the attachment, because they have not answered the interplea, although the marshal has duly answered the intervention and asserted that he rightfully levied on· the